Polaris Receives Verdict in 2010 Lawsuit Involving Discontinued Marine Products Division

Minneapolis, MN (July 25, 2013) – Polaris Industries Inc. (NYSE: PII) today announced that a Los Angeles County jury returned an unfavorable verdict against Polaris on July 23, 2013 in the Esparza (“Plaintiff”) vs. Polaris Industries Inc. lawsuit arising out of a collision between a boat and a 2001 Polaris Virage personal watercraft (“Virage”) that occurred on the Colorado River in 2008. Plaintiff was a passenger on the Virage and was seriously injured. The driver of the other boat has subsequently pleaded guilty to three felony counts of driving under the influence of alcohol and causing injury. The jury returned a verdict finding that the accident was caused by multiple actions: the majority of which was attributed to the negligence of the other boat driver, with the balance attributed to the reckless behavior of the driver of the Virage and the design of the Virage.

While our hearts go out to the Plaintiff and her family, Polaris disagrees with the jury’s finding and believes the evidence clearly demonstrated that the Virage was a safe vessel and the crash was caused by a combination of too much speed, too much alcohol, and reckless driving. The jury awarded approximately $21 million in damages. Although Polaris cannot determine its potential liability with certainty because the judgment has not yet been entered, Polaris estimates its maximum potential liability in this case is $11 million of the total damages.

Taking into consideration the amount the Company previously accrued for this case, it is anticipated that Polaris will record a non-recurring loss from discontinued operations of up to approximately $4 million, net of tax, or approximately $0.06 per diluted share, in the Company’s 2013 third quarter financial statements. The Company’s previously issued guidance for sales and earnings from continuing operations, reported earlier this week, does not change. In 2004, the Company announced that it had decided to cease manufacturing marine products in September of that year. Since then, any material financial results of that division have been recorded in discontinued operations.